Socially Responsible International Business
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Socially Responsible International Business

Critical Issues and the Way Forward

Edited by Leonidas C. Leonidou, Constantine S. Katsikeas, Saeed Samiee and Constantinos N. Leonidou

Acting in a socially-responsible manner has become a crucial success factor for many international firms due to the highly complex, competitive, and volatile global environment in which they operate. This book will contribute new ideas, contemporary knowledge, and original research to the area of socially-responsible international business, and offers challenging directions for future research. Topic covered range from global environmental influences on acting in a socially-responsible way; foreign buyer reactions to responsible business and international market targeting to development of socially-responsible international business strategies.
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Chapter 6: Re-assessing risk in international markets: a strategic, operational, and sustainability taxonomy

Rob van Tulder and Mihaela Roman

Abstract

A key challenge to the operations of multinational corporations (MNCs) is the management of (real or perceived) risk. Extant international business research does not yet make sharp distinctions between various types of risk and thus also has difficulty in distinguishing between ‘normal’ risks and ‘sustainability’ risks. This chapter distinguishes three types of generic risks: operational, strategic and sustainability risks. We develop a qualitative benchmark/taxonomy that makes it possible to (quantitatively) assess the degree to which sustainability has become important in the risk assessments of MNCs. We explore the heuristic value of this benchmark through a longitudinal coverage of public statements of a sample of 70 MNCs spread over a variety of countries and sectors. MNCs identified an increasing number of risks – in particular, sustainability risks. But sustainability risks can also be treated as opportunities or mitigation strategy. This requires more empirical research for which this chapter provides the basic taxonomy.

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